Responsible Sustainable Investing


In this video, Simon Brown, partner and Chartered Financial Planner at BpH Wealth and Dan Lefkovitz from Morningstar, an investment research and management firm, introduce you to the concept of Responsible Sustainable Investing, also known as Environmental, Social and Governance (ESG) investing

Simon Brown, Partner, Chartered Financial Planner-

We always work with clients to discover the purpose of investing. This involves discussing their values and what they want to do with their lives. We find that our clients give back to societies in many ways; this involves volunteering, or sitting on committees or boards of companies or causes that they are interested in.

When our clients are confident enough that they have enough money to meet their lifestyle aspirations they become increasingly interested in expressing their values in their portfolio. They might also target money at a cause that matters most to them. Responsible and sustainable investment is also increasingly important to younger people who are mindful of the environment and their impact on society.

Dan Lefkovitz, Strategist at Morningstar-

At Morningstar we define sustainable investing rather broadly. We consider it to be long term investment approach that incorporates environmental, social and governance criteria; ESG. It can range from old fashioned exclusionary screening like you may have seen in an ethical fund or a socially responsible fund; avoiding stocks of alcohol, tobacco, gambling companies and perhaps coal. It can also just be integrating ESG factors into the overall investment analysis, and that sort of integration is actually the most popular form of sustainable investing today.


Many academic papers have sought to discover whether there is any advantage or disadvantage in selecting companies based on their ESG credentials. In 2015, there was an oxford university study entitled ‘From Stockholder to Stakeholder’. The report reviewed 200 academic papers and observed two key points. 88% of studies showed solid ESG practices resulted in better corporate performance and 80% of studies showed that a companies’ stock price is positively influenced by good sustainability practices. It concluded that ESG is in the best interest of investors and corporate managers. Companies that behave as good stewards of people and planet have better corporate financials. It is possible to express your values in your portfolio with similar expected returns as traditional investments.